Market talk was rife that a spot trade had been done at Yuan 3,100-3,130/mt cash this week, which followed another spot deal concluded at a much lower Yuan 2,600/mt cash just before the new year break last week. The trades, however, were unconfirmed on Wednesday.

A Sichuan smelter said Wednesday he was offered Shanxi spot at Yuan 2,800/mt cash, but did not want to pay more than Yuan 2,700/mt full credit terms currently.

"We are negotiating now, so let's see what happens later this week," the smelter source said.

"Prices are all over the place now, but tradeable is likely closer to the Yuan 2,700/mt cash levels now," a Shanxi refiner said.

In the near term, spot alumina is generally expected to test higher, but the room upwards would be limited, sources said.

High offer levels would support prices while weak sentiment in the aluminum market would cap the rise in alumina, they added.

"Domestic metal prices have firmed and stabilized slightly for now, but it's hard to say if that can be sustained, as domestic stock levels are very high, and no more winter cuts are now expected," a Chinese trader said.

Chinese domestic aluminum stocks currently stand around 1.75 million mt, and are expected to reach 2 million-2.4 million mt in February, sources said.

The front-month primary aluminum contract on the Shanghai Futures Exchange closed at Yuan 14,960/mt on Wednesday, up from Yuan 14,630/mt last week and Yuan 14,420/mt a month ago, but down from Yuan 16,465/mt at the start of fourth quarter 2017.